FG Generates N1.5 Trillion in 3 Months

admin · FG Generates N1.5 Trillion in 3 Months

FG Generates N1.5 Trillion in 3 Months

Vanguard
Emma Ujah & Babajide Komolafe
25 Nov. 2007

High crude oil prices impacted significantly on the nation's total federally-collected revenue during the third quarter of the year, which stood at N1,479.40 billion, representing an increase of 20.0 percent even as the Federal Government recorded a budget surplus of N73 billion in the first six months of 2007. Oil revenue was N1,165.62 billion or 78.8 per cent of the total, and this represents an increase of 22.5 percent over the budget estimates, according to the Central Bank (CBN) Quarterly Economic Report, released in Abuja, yesterday.

"The rise in oil receipts relative to the budget estimate was attributable to the consistent increase in oil prices at the international oil market. Similarly, non-oil receipts, at N313.78 billion or 21.2 percent of the total, was higher than the budget estimates by 11.7 percent," it said. Gross Domestic Product (GDP) grew at estimated 6.05 percent rate in the third quarter, during which Fderal Government fiscal operations resulted in a surplus of N50.98 billion.

The report said economic growth rate was mainly driven by the non-oil sector which recorded an average of about 9.47 percent, with agriculture leading the non-sector. "Aggregate output growth measured by the Gross Domestic Product (GDP) was estimated at 6.05 percent during the third quarter of 2007, compared with 5.73 percent in the preceding quarter. The growth was driven by the non-oil sector which was estimated at 9.47 percent," the report said.

On fiscal operations in the quarter under review, the CBN said: "Federal Government retained revenue for the third quarter of 2007 was N566.62 billion, while total expenditure was N515.7 billion. Thus, the fiscal operations of the Federal Government was estimated to have resulted in a surplus of N50.98 billion, in contrast to the proportionate budgeted deficit of N107.37 billion."

Interest rates, during the period indicated "mixed developments," as it said the average savings deposit rate declined by 0.03 percentage points to 3.51 percent, while the average maximum and prime lending rates were put at 15.63 and 14.48 percent, respectively.

"Consequently, the spread between the weighted average deposit and maximum lending rates widened from 10.42 percentage points in the preceding quarter to 10.63 percent. Similarly, the margin between the average savings deposit and maximum lending rates widened from 14.35 percentage points in the preceding quarter to 14.79 percentage points. "The weighted average inter-bank call rate, which stood at 8.00 percent in the preceding quarter, rose to 8.13 percent at end-September, 2007, reflecting the liquidity squeeze in the inter-bank funds market," CBN said.

The CBN deposit facility stood at 5.5 percent, while the lending facility was 10.5 percent, down from 7.0 and 13.0 percent, respectively. The CBN said its credit to the banks fell by 1.4 percent to N9.7 billion in the review quarter, reflecting a reduction in CBN overdraft facility to banks. Total specified liquid assets of the DMBs stood at N2,807.3 billion, representing 52.0 percent of their total deposit liabilities.

The gross external reserves rose by 12.5 percent to $47.97 billion, compared with $42.63 billion and $40.46 billion in the preceding quarter and corresponding period of 2006, respectively. This level of reserves could finance 22.3 months of current import commitments, compared with 18.8 and 22.1 months in the preceding quarter and corresponding period of 2006, respectively.

Foreign exchange inflow and outflow through the Central Bank (CBN), the report said, amounted to $10.05 billion and $5.44 billion, respectively, resulting in a net inflow of $4.61 billion during the quarter. Foreign exchange sales by the CBN to the authorised dealers fell to $4.04 billion from $4.68 billion in the preceding quarter.

FG records N73b budget surplus

Meanwhile, Central Bank (CBN) half-year economic report released last week said: "Aggregate expenditure of the Federal Government stood at N1,070.6 billion. This was 12.5 percent lower than the proportional budget estimate, but 42.4 percent higher than the expenditure in the corresponding period of 2006. The lower total expenditure relative to the budget estimate resulted from a decline in interest payments on domestic debt. "A breakdown of total expenditure showed that recurrent and capital expenditure accounted for 51.7 and 43.5 percent of the total, respectively, while transfers accounted for the balance of 4.8 percent. Thus, the fiscal operations of the Federal Government resulted in an overall surplus of N73.0 billion as against the proportional budget deficit estimate of N269.8 billion.

"At N1,143.6 billion, the Federal Government retained revenue was 19.9 and 47.1 percent higher than the proportional budget estimate and the level in the corresponding period of 2006, respectively. This was as a result of the receipts of Nl00 billion from the FGN Natural Resources Development Account, issuance of the 4th FGN Bonds and the sharing of Nl83.4 billion from the excess crude account during the period. "Analysis of the retained revenue revealed that the share from Federation Account was N672.7 billion, VAT Pool Account NI9.9 billion, Federal Government Independent Revenue N22.1 billion, TBs/Bond issues N130.9 billion, share of excess crude account NI83.4 billion, with 'others' accounted for the balance.

Total revenue of the State Governments from the Federation Accounts amount (including excess crude) and VAT Pool Accounts amounted to N661.20 billion in the first half of 2007. This indicated an increase of 9.4 percent over the receipts in the corresponding period of 2006. Analysis of the revenue showed that allocations from the Federation Account (including 13 percent derivation fluid and excess crude) amounted to N594.95 billion, while revenue from the VAT Pool Account was N66.25 billion. The receipts from the Federation and VAT Pool Accounts rose by 6.4and 47.5 percent, respectively over the levels in the corresponding period of 2006.

"Statutory allocation to the 774 Local Governments from the Federation Account (including excess crude) and VAT Pool Accounts was N323 .8 billion up by 2.4 percent from the total receipts in the corresponding period of 2006.

The improved revenue was due to a significant increase in the allocation from the VAT Pool Account. A breakdown of the receipts showed that the share of the Federation Account was N274. 14 billion or 84.7 percent as against the 91.7 per cent in the corresponding period of 2006, while that of VAT Pool Account was N49.691 billion or 15.3 percent as against 14.0 percent in the preceding year. Analysis of the allocation on state basis indicated that Kano, Lagos and Katsina topped with 5.7, 5.1 and 4.1 percent of total, respectively, while Gombe, Bayelsa and Abia ranked least with 1.5, 1.2 and 1.0 percent respectively."

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